www.vheadline.com Posted: Thursday, January 30, 2003 - 5:02:49 AM By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: Loyalty to an Institution is one of the rarest qualities of Venezuelan bureaucrats. Traditionally, loyalty among this personnel has been reserved for a man or a group with political power. The Venezuelan bureaucrat is frequently a client and serves a patron. By doing so, he or she obtains the favor of the powerful.

Although this is not new in Venezuelan politics, it has become overpowering during the current government. This is yet another sign that we are dealing with an authoritarian regime. Personality cult  and loyalty to patrons usually reaches very high levels during authoritarian governments. Citizens are either classified as unconditional followers of the leader or as enemies of the regime.

• I am enemy 985 of the regime in the latest ranking of the revolution as published by La Razon ... followed by Cardinal Velasco, at 986 ... all of this comes to mind when considering the tragedy of PDVSA.

I said in my last commentary that the reason for Chavez' merciless attack against PDVSA was his urgent need to politically control this institution and dispose (without limitations) of the $20 billion or so that the corporation generates every year for the Venezuelan nation.

When he arrived in power, he immediately started working towards that goal ... he fired the President of the institution and replaced him with another technocrat, who he felt would be more flexible.

Six months later, he realized that this new technocrat was loyal to the institution, but not to him. Therefore, he dismissed him in favor of one of his most loyal servants, Hector Ciavaldini. It did not matter that he was incompetent and mentally unbalanced, because all he was asked was to be faithful. He was so faithful that he wanted to outdo the master and decided he would annihilate the oil labor unions.

But the unions gave him a sound trashing. So, he also had to be removed.

Chavez then sent a fully-fledged, uniformed Army General to lead the corporation and to do his bidding ... General Lameda ... a man apparently loyal to Chavez ... did something unexpected. Once within the organization, seeing how the professional management behaved, he was won over to their side, becoming loyal to the corporation and not to the man.

At this point in time, Chavez became really enraged. As General Lameda was being driven to his office one morning, he heard on the radio that he had been removed from the presidency of PDVSA and that yet another President had been named in his place ... Gaston Parra,  a Marxist professor at a Maracaibo University.

Parra had spent most of his life writing articles about the need to purge PDVSA of anti-patriotic managers and to staff the company with real patriots. He did not know how oil was found, or produced, or refined, or transported, or sold in the world markets.  He did not have empathy with the managers he was going to supervise. In fact, he hated their guts.

But, he seemed to be a loyal follower and Chavez hoped he would not be a nitwit like Ciavaldini.

I wonder what Peter Drucker would think of this manner of selecting top officers for the most important company of a nation?

At this moment all hell broke loose. PDVSA managers, who had been outraged by the manner with which Chavez was trying to intervene the company; who had seen the arrival of political commissars and spies in their midst; who had silently suffered the verbal abuse of Chavez when he spoke of the need to audit the performance of PDVSA, intimating dishonest dealings, now refused to roll over and play dead.  They rejected the new president and the new board, stacked with friends of the government.

This rebellion actually ousted Chavez from the Presidency in April 2002, until he was brought back, not by the people but by General Baduel, the man who claims to have lived several lives and is now emerging as the strong man behind the puppet ... a kind of Venezuelan Noriega.

For the fourth time, therefore, Chavez was defeated in his attempt to control PDVSA. So he tried just one more time. From Vienna, he brought in Ali Rodriguez Araque, his former Minister of Energy.  A former guerrilla fighter during the 1960s, Rodriguez  had specialized in kidnapping and sabotage of oil facilities.

As a technical staffer for Shell in those years, I remember that the criminals' wrath was reserved for US companies. We kept putting up signs on our pipelines saying : "The Exxon pipelines are the others.... these are ours!" in the hope that they would spare ours ... and they did. They were selective!

So, Rodriguez came in and ... for a brief period ... things came back to "normal." He projected a suave, civilized image and tried to speak the proper language of business. But not for long. Chavez wanted a servant, not a manager ... and he got one. Rodriguez Araque opened the doors of PDVSA to the Bolivarian Circles ... he refused to dismiss the spies and commissars imbedded in the organization ... he promoted unworthy persons to positions of authority ... he became an instrument for the politicization of PDVSA ... and the managers would not accept it.

The managers of PDVSA went on strike ... not asking for bigger salaries, not asking for privileges, not asking for power. They went on strike, they put their jobs and future on the line to try to preserve the institution, to defend the institution against the desires of Chavez for political and financial control. This is what they were supposed to do as professional managers, as trustees of the institution and this is exactly what they did.

Their loyalty was not for one man, or one ideology, or one political tribe ... their loyalty was to PDVSA.

Today PDVSA is burning. I do not know if it will burn to the ground ... I hope not ... I trust PDVSA will be reborn after this nightmare.

I still hope we are not ... as the hobbit  Merry said in "The Two Towers" ... engaged in " a meaningless journey in a hateful dream."

I trust that the house of Mordor will fall, and that the Venezuelan people will be ... once again ... homeward bound.

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email ppcvicep@telcel.net.ve

reuters.com Thu January 30, 2003 04:06 PM ET

FORT LAUDERDALE (Reuters) - America Online Latin America Inc. AOLAC.O , which offers Internet services in Mexico, Argentina and Brazil, said on Thursday it is no longer in conditional listing on the Nasdaq SmallCap Market, having met minimum capitalization requirements.

The company, backed by media giant AOL Time Warner Inc. AOL.N and Venezuela's Cisneros Group, said it will trade once again under the AOLA AOLA.O symbol when markets open on Thursday.

Nasdaq requires $35 million in market capitalization for the company to list its Class A common stock, AOL Latin America said.

Earlier this month, stock conversion by the two main shareholders of the company helped to boost its capitalization levels and gained it a six-month extension to comply with the $1 minimum bid price requirement for the Class A stock

www.voanews.com Greg Flakus Caracas 30 Jan 2003, 17:47 UTC

After nearly two-months, the opposition strike in Venezuela is showing signs of weakening, but the divide between those who oppose and those who support President Hugo Chavez remains wide.

The large shopping malls remain closed, but many smaller shops are open. Supermarkets still have shortages, but quite a few restaurants and bars are open at night.

Most gasoline stations are closed, and people wait in long lines at the ones that are open, yet, vehicles still circulate on Caracas streets, using fuel brought in by boat from other countries.

The general strike that shut down almost all commerce in Venezuela since December 2 is starting to come undone. Little by little, merchants are opening their doors, or expanding hours of operation, if they were already open. Owners of shopping centers, theaters and other popular destinations say they expect to open next week.

The Venezuelan Banking Council has decided to reopen banks to the public on Monday. President Chavez had brought pressure on the bankers by threatening to withdraw armed forces funds from the banks.

But Banking Council Vice President Nelson Mezerhane says that pressure had nothing to do with the decision to reopen.

He says the pressure felt by the banking sector came from the clients whose deposits the banks hold. For the past two-months, the banks have been open only a few hours a day, leading to long lines and severe restrictions on financial transactions.

The strike has cost Venezuela more than $4 billion, and the economy is expected to show a 25 percent contraction this year as a result. The nation's currency, the Bolivar, has lost nearly 30 percent of its value.

Oil production in this, the world's fifth largest producer, fell as low as 200,000 barrels-a-day last month. Last week, the government managed to move production back up to about one-million-barrels-a-day, but that is still only about a third of what used to be produced.

Opposition rally in Caracas (VOA photo - G. Flakus)The weakening of the strike in the banking and commercial sector is seen by Chavez supporters as a victory for their side, but opposition leaders say their struggle is not over. The strike in the oil industry continues, with 35,000 of the nation's 40,000 oil workers remaining at home.

Hundreds of anti-Chavez protesters gather every evening at a plaza in the fashionable Altamira section of Caracas to listen to anti-Chavez speeches and songs. The divergent elements of the opposition remain united on their principal goal, that of removing Mr. Chavez from power.

In a smaller plaza, in a working-class neighborhood a few kilometers away, Chavez supporters hold nightly meetings that draw smaller crowds. Public opinion polls indicate that around 30 percent of Venezuelans back President Chavez. His mostly poor supporters deride the opposition leaders as "oligarchs" and say that only Mr. Chavez cares about the poor.

International diplomatic efforts to end the political conflict in Venezuela are showing signs of progress. Representatives of the six nations referred to as "friends of Venezuela" have begun arriving in Caracas for meetings Friday with government and opposition leaders.

The diplomats from the United States, Brazil, Chile, Mexico, Spain, and Portugal are pressing for a solution, based on proposals set forth by former U.S. President Jimmy Carter on January 21. Under the Carter plan, there would either be a recall referendum in August, or a change to the constitution that would allow for early elections.

abcnews.go.com The Associated Press CARACAS, Venezuela Jan. 30 —

With many opponents of President Hugo Chavez preparing to return to work, Venezuelans leading a 60-day-old strike shifted tactics Thursday, diving headlong into an initiative to shorten his six-year term with international help.

After two grueling months, strike organizers have agreed to let shopping malls, banks, franchises and schools reopen next week. Meanwhile, production continues to creep upwards in the vital oil industry, where the walkout has been strongest.

As diplomats from six nations headed to Caracas on Thursday to push for early elections, opposition leaders were planning a petition drive to support several measures, including a proposed constitutional amendment that would:

Cut presidential terms from six years to four;

Hold new presidential and congressional elections this year;

Create a new elections council to organize any vote;

Get the Supreme Court to determine when, exactly, a recall vote on Chavez's presidency can be held;

Allow Chavez and legislators to seek re-election.

Similar ideas were floated by former President Jimmy Carter during a recent visit to Caracas. The government said it was studying the opposition's proposal but won't allow it to shorten Chavez's term.

Diplomats from the United States, Brazil, Chile, Mexico, Portugal and Spain dubbed the "Group of Friends" of Venezuela planned a private dinner meeting late Thursday with Cesar Gaviria, secretary general of the Organization of American States. Gaviria has mediated talks here since November.

The envoys, including Curt Struble, acting U.S. assistant secretary of state for the Western Hemisphere, planned meetings with Chavez and the opposition on Friday.

Gaviria said the diplomats can monitor compliance with any electoral pact and reduce tensions that have led to six deaths since the strike began Dec. 2. "The country can't sustain more tension," he said.

Strike leader Manuel Cova of the Venezuelan Workers Confederation said Thursday a new presidential election could be held as early as March.

"To do this we need the guarantees of the international community," Cova said. "If we don't do it this year, we'll be in prison, or in exile, there won't be press freedom. ... We must do it this year."

Chavez had welcomed Carter's ideas about early elections. But he also has threatened to abandon the OAS-mediated talks, saying he won't negotiate with "terrorists."

Chavez failed to expand the "Friends" to include governments more sympathetic to his populist revolution. He has since warned the diplomats not to interfere in internal affairs.

The opposition called the strike to demand a nonbinding referendum on Chavez's rule in February, as petitioned by 2 million Venezuelan voters. It later upped the ante to demand Chavez's ouster.

But the Supreme Court, citing a technicality, indefinitely postponed the referendum. Chavez, elected in 2000 to a six-year term, shows no signs of leaving.

The deadlock has hobbled production in the world's No. 5 oil exporter. Analysts predict the economy will shrink 25 percent this year after an 8 percent contraction last year.

The government has cut its $25 billion 2003 budget by 10 percent and announced Thursday it will cut the state-owned oil monopoly's $8 billion budget by $2.7 billion to offset oil losses. Oil accounts for half of government income and 30 percent of Venezuela's $100 billion gross domestic product.

Chavez says oil production has reached 1.4 million barrels a day, and exports 1 million barrels a day a third of pre-strike export levels.

Dissident oil executives say production is about 1 million barrels and exports half that. Venezuela still must import gasoline.

After spending more than $70 million a day to support the bolivar currency, the government suspended sales of U.S. dollars until it unveils currency controls next week.

The bolivar, which has weakened 25 percent against the dollar this year, may be fixed at 1,600 per dollar, with monthly devaluations afterward, said Ricardo Sanguino, a member of Congress' finance committee.

The dollar has reached 2,500 bolivars on black market trading.

www.granma.cu Havana. January 30,  2003

TODAY Thursday, January 30, sees the inauguration of Cuba and the world’s date with books, literature, at the San Carlos de la Cabaña Fortress, venue for the 12th International Book Fair. The event continues into to March in different parts of the country.

Some 1,000 titles, the majority newly published on the island, are the national book industry’s essential ingredient in reaffirming its will to contribute to the aims of achieving a general, integral culture.

This year’s forum is dedicated to the Andean community countries, represented by a comprehensive selection of its rich culture. The Fair also includes a strong literary and academic program plus a special tribute to Cuban poet, narrator and essayist Pablo Armando Fernández.

Outstanding writers from Venezuela, Colombia, Ecuador and the United States are sharing 10 days of knowledge and culture-based exchanges with promoters, experts from various nations and Cuban authors.

This year, acknowledged Cuban publishers are displaying their wares alongside 15 publishing houses from the provinces and the Isle of Youth special municipality, thus reinforcing the fact that books are being produced all over the country.

The Book Fair officially opens its doors to the public tomorrow; experts and Cuban families have until February 9 to renew their acquaintance with books plus the best in literature for all ages.

From February 10 the fair moves out to the western provinces, then onto the center of the island until reaching eastern Cuba on March 2. It will close its doors in Santiago de Cuba, after bringing a cultural message to 30 of the country’s cities.